Hinduja Group in lead to buy Houghton Int'l for $1.15 bln-sources

NEW YORK Thu Oct 4, 2012 5:55pm EDT

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NEW YORK Oct 4 (Reuters) - Family-owned Indian conglomerate Hinduja Group is the front-runner to acquire Houghton International, a U.S. producer of metalworking fluids and other chemicals, following a $1.15 billion bid, according to two people familiar with the matter.

The multibillion-dollar global investment and banking group topped offers by private equity firms in the auction for Houghton, the sources said. AEA Investors LP, the investment firm that owns Houghton, could still decide to sell to another party or not at all, the sources added.

Representatives of the Hinduja Group, Houghton and AEA did not respond to requests for comment.

Valley Forge, Pennsylvania-based Houghton makes specialty chemicals, oils and lubricants for the metalworking, automotive, steel and other industries. Deutsche Bank and Morgan Stanley were hired to advise on the sale process, people familiar with the matter previously told Reuters.

Founded in 1914, the Hinduja Group expanded into investment banking, international trading and global investments under the present leadership of Chairman Srichand Hinduja, supported by his brothers, Gopichand, Prakash and Ashok. The group has a presence in 35 countries, employing over 65,000 people.

Houghton merged in 2007 with an affiliate of AEA. Terms of the deal were not disclosed, but Morgan, Lewis & Bockius LLP - a law firm that represented Houghton on the transaction - refers to it on its website as a $400 million merger.

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